Howard right on workplace rules

Opposition Leader
Tony Abbott
and his fellow senior frontbenchers know that former prime minister
John Howard
is right in calling for a return to the industrial relations system that applied during his prime ministership. The rules that applied from 1996 to 2005 in the Workplace Relations Act were not always perfect, but they allowed workers and employers to sign individual contracts. This is against the law under the present system, in a ludicrous retreat from a long sought after economic reform.

The Work Choices amendments, which were passed into law in 2005, also did not leave small businesses so vulnerable to unfair-dismissal actions as the present system.

In an off-the-record speech at a banking forum earlier this month, reported in The Australian Financial Review yesterday, Mr Howard noted that in the past 25 years, successive governments abolished tariffs, freed the financial system, reformed the tax system and privatised industries. It was only in industrial relations that the country had gone backwards. This is a remarkable development in itself. But more importantly, with signs emerging that the easiest years of the resources boom and the sense of wealth it created are now behind us, the retreat on industrial relations will have costly consequences. Australia will have to fall back on its competitiveness, which is greatly hampered by our present IR system.

Mr Howard has been cautious about intervening in politics since his departure in 2007, but now he is rightly concerned that Mr Abbott is so scarred by the 2007 loss that he will fail to gain a mandate for change if he wins the next election. As Mr Howard noted, the political problem with Work Choices was that it removed the “no disadvantage test", opening it up to Labor’s scare campaign in the 2007 election, even though the Howard government belatedly reintroduced a “fairness test".

It is ludicrous that in the knowledge-based economy of 2012 it is unlawful for individual workers and their employers to strike their own statutory contracts. Mr Abbott’s alternative of using the individual flexibility clauses within collective agreements is unlikely to deliver the flexibility that modern workplaces need to respond to competitive pressures. The Productivity Commission’s retail industry review last year found little evidence that individual flexibility arrangements within awards or collective agreements promoted more flexible working arrangements that benefit both business and employees.

Although Mr Howard argued that Work Choices was not the main reason for the Coalition’s 2007 election defeat, Mr Abbott is far too prone to fall for the conventional wisdom with his rhetorical flourishes about Work Choices being dead and buried. The Coalition is also too spooked by former leader John Hewson’s “Fightback", which lost them the unloseable 1993 election to Paul Keating and Labor. Mr Abbott should show some backbone and take a more forensic approach to what’s wrong with the Fair Work system, and acknowledge that while Work Choices had its flaws, it was more flexible and had a better balance of rights between employer and employee than the Fair Work Act does.